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Florida insurer pays $140M to settle Medicare, Medicaid fraud claims

A Florida-based insurer recently agreed to pay nearly $140 million to the federal government and to nine states to resolve claims that it overbilled Medicare and Medicaid.

WellCare Health Plans Inc., which is based in Tampa, had been accused of inflating what types and sorts of medical care it had provided to patients so that it could commit Medicaid fraud by submitting artificially large reimbursements requests. It also reportedly knew that it had been overpaid by Florida's state Medicaid program and intentionally did not pay the money back.

WellCare declined to comment on the matter, other than to say it is glad the affair is over. That leaves one to wonder whether this was really intentional, or whether it was the result of a mistake (after all, seeking reimbursement from federal program is quite an exercise in red tape) and the company decided to settle so that it could wash its hands of the matter. WellCare also noted that the $137.5 million settlement is not expected to impact its finances this year.

The lawsuit was brought by a former financial analyst under the Federal False Claims Act, which gives a portion of any damages awarded to the person who first alerts officials to alleged fraud. He will receive about $21 million from the settlement, which, if you think about it, is something of an incentive to be disloyal to one's employer.

Besides Florida, Ohio, New York, Missouri, Indiana, Illinois, Georgia, Connecticut and Hawaii will share in the settlement.

Source: Bloomberg Buinessweek, "WellCare to Pay $137.5 Million to Settle False Claims Case," David Voreacos, April 3, 2012

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